U.S. Retail Sales Rise, Wholesale Price Index Falls

Mukesh Buch
15 Jan, 2013
New York City

Retail sales in December were ahead of expectations after consumers overlooked Washington gridlock and the prospects of future tax increase. Reported wholesale price index declined for the third month in a row, however the index does not capture the broader prices increases in the service sector.

[R]9:55 AM New York – Retail sales in December were ahead of expectations after consumers overlooked Washington gridlock and the prospects of future tax increase. Reported wholesale price index declined for the third month in a row, however the index does not capture the broader prices increases in the service sector.[/R]

Autos Drive Retail Sales Higher

Retail sales increased 0.5% in December from the revised 0.4% rise in November, according to the data released by the Commerce Department today. November sales were earlier estimated at 0.3% increase.

Sales from a year ago month in December increased 4.7% and jumped 5.2% in the year 2012.

Core sales excluding automobiles, fuel and building materials that reflect the consumer spending component of gross domestic product increased 0.6% after rising 0.5% in November.

Wholesale Inflation Falls Again

U.S. producer price index declined 0.2% in December, third monthly declined after adjusting for seasonal factors according to the Labor Department.

Wholesale prices, excluding volatile food and energy costs rose a fraction 0.1% in the last month. Food price drove the most of the decline in the price index.

For the year 2012, wholesale inflation increased 1.3%, the lowest annual rate in six months.

Weak Manufacturing Conditions in New York

Manufacturing in New York state declined for the sixth month in a row. The index tracked by the New York Fed declined to -7.8 in January from a revised -7.3 reading in the month before.

Shipments index in the month declined sharply to -3.1 from 11.9 and new order index fell to -7.2 from -3.4. The index of business conditions in the month ahead increased to 22.4 in January from 17.95 in December.

The employment indexes showed a slight improvement but general conditions were negative. The index for the number of employees rose to -4.3 from -9.7 and the average employee workweek index jumped to -5.4 from -10.8.